As with any cost-benefit analysis, there are problems in the identification and quantification of all costs and benefits. Future benefits are expected future benefits and are therefore not certain. The choice of appropriate discount rate is also problematic since the future flows might stretch some time into the future and long-term forecasting of inflation will be necessary. It is extremely unlikely that an 18-year-old will sit down and carry out a detailed cost-benefit analysis on entry into higher education. But the fact that the introduction of tuition fees for higher education courses in 1998 led to a 2.5 per cent fall in applications to university implies that some sort of evaluation of relative costs and benefits does take place, albeit on an ad hoc basis. The fall is greater for mature
students for whom the opportunity cost will be higher